Belarus cuts rate 2nd time, inflation slows toward target

The central bank of Belarus cut its benchmark refinancing rate for the second time this year, saying this would help ensure a neutral monetary policy as inflation continues to slow.
The National Bank of the Republic of Belarus cut its refinancing rate by another 50 basis points to 9.0 percent and has now cut it by 100 points this year, extending an easing cycle since April 2016. Since then the repo rate has been lowered by 16 percentage points.

The bank also narrowed its interest rate corridor to 2 percentage points from 2.5 points to increase the efficiency of the transmission of monetary policy on inflation.
The overnight loan rate was cut 75 basis points to 10.0 percent and the overnight deposit rate by 25 basis points to 8.0 percent to help narrow the range of rates on instruments that regulate bank liquidity.

“Subsequently, these rates will change simultaneously with the refinancing rate by an appropriate amount,” the central bank said.

Inflation in Belarus slowed to 5.3 percent in September and the central bank said it expects inflation to be near its 5.0 percent target by the end of 2019 and during 2020.
Last month the central bank’s deputy chairman, Sergei Kalechits, said the main objective next year is to keep inflation below 5 percent, to maintain the level of foreign exchange and gold reserves, develop financial market instruments and strengthen the banking system.

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